That old sacred cow

January 05, 1995|By Mona Charen

THE EXHILARATING reform that began yesterday in Congress will sweep away some of the most irritating aspects of congressional arrogance. If they are true to the Contract With America, the Republicans will require Congress to live by the same laws it passes for everyone else, will hire a major auditing firm to conduct a comprehensive audit of Congress for waste, fraud and abuse, will cut the number of committees and staff by one-third, will limit the terms of committee chairmen, will ban the casting of proxy votes, will open committee meetings to the public, will require a three-fifths majority to raise taxes and will implement zero baseline budgeting.

Next, they plan to move on and implement the rest of the contract, which contains some good and necessary reforms.

What the Republicans have explicitly declined to consider, at least for now, is any reform of Social Security. There are solid political reasons to put it off, but unless and until the Republican Party does attack this sacred cow, it would do well to mute its revolutionary rhetoric.

Sincere conservatives who dislike the unnecessary intrusions of the state simply cannot continue to say, "Social Security is off the table." To do so is to accept the premise that a fundamental duty of citizenship -- to save and provide for one's own retirement -- cannot be performed by ordinary people and must be managed by the state. As David Frum argues passionately in his book "Dead Right," the existence of programs like Social Security has an infantilizing effect upon people. Americans of 1935, he argues, were thriftier, less self-indulgent, tougher and less whiny than our generation because life was harder. The social programs of the past 60 years have had "feedback effects" on the American character. Life has lost some of its hard edges, and Americans have lost some of their grit.

How much to reverse the trend is now the question in Washington and in 50 state capitals -- and leaving Social Security aside is not intellectually honest.

As Peter Peterson writes in his book "Facing Up," entitlement spending, which amounted to 53 percent of the federal budget in 1993 and will explode beyond what is sustainable in 2010 when the gigantic baby boom generation starts to retire, is sustained by a series of myths.

The most stubborn is probably the notion that Social Security and Medicare are "earned" -- that beneficiaries are only drawing out what they have contributed. In fact, most currently retired Americans receive benefits that are two to five times greater than the actuarial value of prior contributions by both employee and employer. The payback for the Medicare Hospital Insurance program is five to 20 times greater.

Another myth is that the elderly are poorer than the young. But the poverty rate for the elderly (taking all non-cash benefits as income) was 6 percent in 1990, whereas the rate for children was 15 percent. Ah, say critics, but Social Security is the reason! To which the proper response is: We can provide for the elderly poor without breaking the bank. It is the lavish support of those above the median income that will soon become unsustainable. As Mr. Peterson points out, "In 1991, about half of all federal entitlements went to households with incomes over $30,000. One-quarter went to households with incomes over $50,000."

Lots of politicians dismiss the coming Social Security train wreck by claiming that the system is in surplus -- but that is basically an accounting trick. The surplus from the payroll tax is not in an earmarked fund for future beneficiaries; it is used each year to offset the overall federal budget deficit.

Mr. Peterson and the Concord Coalition (which will receive all royalties from the book as well as Mr. Peterson's annual Social Security checks) suggest a number of reforms, including an "affluence test," raising the retirement age and trimming benefits for federal retirees. But it would be truly bracing to hear someone suggest the gradual elimination of Social Security -- as Charles Murray has suggested abandoning welfare.

Leaving entitlements out of a national discussion on cutting the size of government is like analyzing the sinking of the Titanic without mentioning icebergs.